4 ms·

I'm fairly certain that you keep the balance in a single wallet, so can send from a different address than the one that received the funds, so really, all this

I'm fairly certain that you keep the balance in a single wallet, so can send from a different address than the one that received the funds, so really, all this tells us is that they haven't been stupid and sent money out from the same wallet they sent it to.

zby 14y ago
It is not possible to send bitcoins from a different address that received them, it does not matter what addresses you control (i.e. have in your wallet) - from any address you can only send bitcoins that were previously sent there (with the only exception for mining new bitcoins).
- reubensutton 14y ago
  I stand corrected. So, how can they ever be truly laundered? Because eventually someone is going to want to convert them to cash, and at that point, they're traceable right?
  - danielweber 14y ago
    Well, you can't "convert" Bitcoins to cash. You can trade them to someone who will give you dollars in return. And they generally keep real-world information for the people they transact with.
  - elliottcarlson 14y ago
    By sending smaller values to different addresses and continuing that route. It wouldn't clear the trail, but the more you dilute the trail the more annoying it would become to trace it back to that original theft. For example, if they had 1000 bitcoins, broke that up in to 4 pairs of 250, then broke that up in to 8 transactions of 125 and kept decreasing it then there would be so many transactions in the history of those coins. Additionally, there are laundering services out there for bitcoins (eg http://www.bitcoinlaundry.com/ http://www.bitcoinlaundry.com/, http://app.bitlaundry.com/ http://app.bitlaundry.com/) which will just cycle all the bitcoins with others - eventually it will be so mixed up with others you can cash out without worrying about being traced easily.
    - eropple 14y ago
      Your post strikes me as naive. All that laundering does is tag more addresses as "hot". You still have a graph of where the bitcoins have gone. Bitcoin is done with computers. It's no more "annoying" to trace one hundred transactions than it is to trace one.
      - elliottcarlson 14y ago
        What if one of your physical paper currencies in your wallet right now was involved in a robbery at some point? Should that serial number no longer be valid and cause you to lose that money when you attempt to spend it in the store? If currency is successfully laundered it frequently will end up in someone elses wallet - the same would happen with bitcoins, with the main difference being that it could be tracked back to the originating offense. Maybe an exchange will want to keep an eye out for that - but what makes you think a laundering site or gambling site will care? I give you $100, and you give me back $95 from your wallet and since I can use a different wallet to receive the funds it isn't tied together. In the end someone will end up with those hot bitcoins and fractions there-of, but they might be completely innocent - so should they not be able to use those funds? Should every person care about the source of their money? If you could track your paper currency back, would you reject any transactions that were at some point involved with some illicit behavior? I'm not talking about the technical feasibility, but really if people are bothered enough to care.
      - feral 14y ago
        >Your post strikes me as naive. All that laundering does is tag more addresses as "hot". You still have a graph of where the bitcoins have gone. Lets say you have an address with 1000 bitcoins in it. A thief steals a lot of bitcoins, and maliciously, unknown to you, sends you 10 stolen bitcoins. You now have an account/address with 1010 bitcoins in it. The system you have just proposed tags your address as hot. What happens next? [This is not a hypothetical scenario: in the 'allinvain' alleged theft, we saw several organisations and individuals receive stolen bitcoins from quite soon after the theft; probably as unsolicited donations.]
        14y ago
  - politician 14y ago
    Bitcoin transaction processors can charge a fee for the service, so one channel for laundering BTC could involve cycling small balances among a large number of addresses allowing "clean" coins to leak out through transaction fees.
feral 14y ago
You don't seem to understand how Bitcoin works: the balance of the address is what has the 'coins'. They dont exist independent of the balance of the address. So you can't spend them from a different address, without first transferring them to that different address; and that transfer must be publicly announced to the network. It is the public announcement which gives the other address the ability to spend the 'coins'.
- reubensutton 14y ago
  You're correct, I assumed it was the wallet that held the coins, not the individual addresses.

zby 14y ago

It is not possible to send bitcoins from a different address that received them, it does not matter what addresses you control (i.e. have in your wallet) - from any address you can only send bitcoins that were previously sent there (with the only exception for mining new bitcoins).

reubensutton 14y ago
I stand corrected. So, how can they ever be truly laundered? Because eventually someone is going to want to convert them to cash, and at that point, they're traceable right?
- danielweber 14y ago
  Well, you can't "convert" Bitcoins to cash. You can trade them to someone who will give you dollars in return. And they generally keep real-world information for the people they transact with.
- elliottcarlson 14y ago
  By sending smaller values to different addresses and continuing that route. It wouldn't clear the trail, but the more you dilute the trail the more annoying it would become to trace it back to that original theft. For example, if they had 1000 bitcoins, broke that up in to 4 pairs of 250, then broke that up in to 8 transactions of 125 and kept decreasing it then there would be so many transactions in the history of those coins. Additionally, there are laundering services out there for bitcoins (eg http://www.bitcoinlaundry.com/ http://www.bitcoinlaundry.com/, http://app.bitlaundry.com/ http://app.bitlaundry.com/) which will just cycle all the bitcoins with others - eventually it will be so mixed up with others you can cash out without worrying about being traced easily.
  - eropple 14y ago
    Your post strikes me as naive. All that laundering does is tag more addresses as "hot". You still have a graph of where the bitcoins have gone. Bitcoin is done with computers. It's no more "annoying" to trace one hundred transactions than it is to trace one.
    - elliottcarlson 14y ago
      What if one of your physical paper currencies in your wallet right now was involved in a robbery at some point? Should that serial number no longer be valid and cause you to lose that money when you attempt to spend it in the store? If currency is successfully laundered it frequently will end up in someone elses wallet - the same would happen with bitcoins, with the main difference being that it could be tracked back to the originating offense. Maybe an exchange will want to keep an eye out for that - but what makes you think a laundering site or gambling site will care? I give you $100, and you give me back $95 from your wallet and since I can use a different wallet to receive the funds it isn't tied together. In the end someone will end up with those hot bitcoins and fractions there-of, but they might be completely innocent - so should they not be able to use those funds? Should every person care about the source of their money? If you could track your paper currency back, would you reject any transactions that were at some point involved with some illicit behavior? I'm not talking about the technical feasibility, but really if people are bothered enough to care.
    - feral 14y ago
      >Your post strikes me as naive. All that laundering does is tag more addresses as "hot". You still have a graph of where the bitcoins have gone. Lets say you have an address with 1000 bitcoins in it. A thief steals a lot of bitcoins, and maliciously, unknown to you, sends you 10 stolen bitcoins. You now have an account/address with 1010 bitcoins in it. The system you have just proposed tags your address as hot. What happens next? [This is not a hypothetical scenario: in the 'allinvain' alleged theft, we saw several organisations and individuals receive stolen bitcoins from quite soon after the theft; probably as unsolicited donations.]
      - 14y ago
- politician 14y ago
  Bitcoin transaction processors can charge a fee for the service, so one channel for laundering BTC could involve cycling small balances among a large number of addresses allowing "clean" coins to leak out through transaction fees.

feral 14y ago

You don't seem to understand how Bitcoin works: the balance of the address is what has the 'coins'. They dont exist independent of the balance of the address. So you can't spend them from a different address, without first transferring them to that different address; and that transfer must be publicly announced to the network. It is the public announcement which gives the other address the ability to spend the 'coins'.

reubensutton 14y ago
You're correct, I assumed it was the wallet that held the coins, not the individual addresses.